The Amazon of agriculture

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This article was published 20/08/2021 (1518 days ago), so information in it may no longer be current.

A Manitoba agriculture company has finalized its acquisition of a U.S. business, known in the industry as the premier online destination for agronomy products.

Pure-play firm Farmers Edge Inc. nailed down terms and agreements for the deal earlier this week, with Indiana-based CommoditAg LLC., allowing a significant expansion for farmers to purchase items directly from suppliers and advancing the operation’s digital ecosystem strategy.

“It’s a rapturous development and a win-win,” said Wade Barnes, chief executive officer and founder of Farmers Edge, in an interview.

“I’ve been a farmer myself for years and I know how important it is to have direct relationships with vendors so you know you can trust them. It’s a very personal thing in our sector, and this is advancing that in a completely robust way.”

Barnes said the CommoditAg e-commerce platform is “already the best-in-class and simplest-to-use omnichannel experience out there, but combining it with our FarmCommand platform will only accelerate things further.”

According to the acquisition terms, CommoditAg will continue to function as a wholly owned subsidiary, with its current executive leadership remaining as the managers at the top of that company. “Simply put, they know what they’re doing and we want them to keep doing that,” said Barnes.

The Indiana company has 14 retail distribution partners with over 500 locations, and represents a portfolio of more than 200 brands and products. It works with more than 25 suppliers of all sizes, including those that handle items related to crop protection, seed, fertilizer, micronutrients, lubricants and animal-nutrition.

Currently, there are at least 40 local fulfilment centres in operation for CommoditAg covering 13 U.S. states. It plans to expand to three-quarters of the American market by the end of this calendar year.

CEO John Demerly said he’s thrilled about partnering with Farmers Edge, a company he believes shares his vision and mission for CommoditAg, which has roots dating back to the early 1900s.

“Farmers Edge brings together all parties in the supply chain so farmers get seamless, transparent and secure connections,” Demerly said. “We look forward to growing together, bringing new digital capabilities to the market, and driving innovation that supports our customers’ success.”

Founded in 2005, Farmers Edge quickly established itself as a global business that focuses on finding ways for farmers to increase their yields, maximize revenues, reduce costs of production and implement data-driven ideologies — all while being an early proponent for sustainability practices.

Every day, it’s estimated the company processes and extracts value from 100,000 fields and connects 25 billion data records to 90,000 connected devices.

However, over the past year or so, there have been some difficulties for the Manitoba business.

Just last week, National Bank of Canada analyst Richard Tse was one of many that downgraded his financial ratings and target prices for Farmers Edge shares, because the company fell short on its earnings.

Revenue for the second quarter of 2021 was lower by $2.9 million compared to the same period in 2020, making $6.2 million for this round of earnings. That was well below National Bank projections of $10.5 million — which Tse linked to lower levels of subsidies, a delay in conversions of the free-trial programs and the fluctuating foreign exchange.

Still, Tse is hopeful for the company, particularly its newer programs, which he said “could be a key catalyst for growth” in a note to investors.

“This fiscal year started by taking a beating because of just so many reasons,” said Barnes. “But those misses aside, we’re still en route to a great third quarter and an even better fourth one, if all goes well with major things happening like this deal. I can say, for sure, we’re geared up to be in the best shape we’ve been in years and there’s lots more to come.”

 

temur.durrani@freepress.mb.ca

Twitter: @temurdur